Middle East demand cushions global dairy price drop at latest GDT auction
The upheaval in the Middle East may have eased the fall in global dairy prices last week.
ASB has become the first bank to forecast a milk price above $9/kgMS for this season.
Senior economist Chris Tennent-Brown says the bank is lifting its forecast by 60c to $9.20/kgMS. The record milk price - $9.30/kgMS - was paid out in 2021-22 season.
He notes that rather than the downward sloping prices seen across the Global Dairy Trade (GDT) contract curve for whole milk powder prices at earlier events, they are now seeing the curve flatten, with average winning prices above US$3,500 MT over all contracts and WMP products, right through the key part of the season.
“Dairy prices are up significantly on year-ago levels, and we think Fonterra should have been able to already complete the bulk of this season’s USD hedging at a similar effective rate to last season’s US$0.6120. So we think Fonterra’s confidence to lift the milk price forecast range is well placed.
“In fact, we’re lifting our forecast for the season by 60c to $9.20/kgMS. It’d be great to see the previous $9.30 milk price record get broken, but we’ll wait to see a bit more of the season’s price action before calling that.”
He says how Fonterra can manage its product mix will be important, as well as the obvious importance of the trajectory for prices.
“We are not alone in expecting whole milk prices to trend lower at this time of the year, as they often do. But the opposite has been happening as Fonterra is hopefully capturing as much as possible of the very high prices in other products. There’s a balance of risks around any forecast, but at this juncture, we are comfortable to be picking a farmgate milk price in the top half of Fonterra’s forecast range, north of the $9 midpoint.”
A Chinese business leader says Chinese investors are unfairly viewed as potential security risks in New Zealand.
In the first of two articles focusing on electrification in New Zealand, Leo Argent talks with Mike Casey, operator of the 100% electric-operated Electric Cherries orchard and founder of advocacy group Rewiring Aotearoa.
A Foundation for Arable Research initiative which took a closer look at the efficiency of a key piece of machinery for arable farmers - their combine harvesters - has been recognised at the Primary Industry NZ Awards.
Prime Minister Christopher Luxon has reiterated New Zealand’s ‘China And’ policy, adding that it wasn’t about choosing one market over another but creating more options for exporters.
A long running trade dispute between New Zealand and Canada over dairy access has been resolved.
New Zealand Police is urging rural property owners to remain vigilant and ensure their property is secure.
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